877.211.9711

Online Company Store - So, who owns the inventory?

Online Company Store - So, who owns the inventory?

Company stores exist to provide immediate access to branded materials and to parcel these materials out quickly for use in the field. Your company store should include a healthy mixture of both inventoried products and non-inventoried products. Typically, the first question asked is:

Who owns the inventory?

Will the vendor finance the inventory? Will you purchase the inventory and have the vendor manage it? Although most companies will not finance the inventory for you, there are some who do. “No obligation for inventory purchases” sounds like minimal risk, but beware, both areas are fraught with dangers if not approached with eyes wide open to potential disasters. 

Vendor Financed Inventory

Pros

Cons

No up-front obligation

Balloon payment/buy back agreement required

 

Exclusive contract

 

Minimal brand oversight

 

No regular reporting for accountability

 

Vendor controls product selection

Questions to ask yourself and your vendor:

  • What agreement terms should we be aware of if we are sold a “no-risk” store?
  • Do we have to sign an exclusive agreement in exchange for vendor-financed inventory?
  • When a product runs out or is close to running out, who makes the purchasing decision?
  • What if we dislike the product selection? Who owns this part of the process?
  • What if we see an item that we want in the store but the vendor is reluctant to finance it?
  • Is the vendor we are working with financially sound enough to finance our inventory?
  • What if the service we are rendered is not sufficient? What steps would we need to take to claim back our store?
  • Should we sign over control for our branded product selection to a vendor or should this be a shared responsibility?
  • Who bears the responsibility for marketing the store and the products? What if this service is performed poorly by our estimation?
  • What if the vendor walks away from us as a client? Will the inventory be sold back?
  • Will there be regular reporting or accountability features built in regarding who will have permission to use the inventory?